Friday, October 17, 2014

Why This Election Is Going To Suck : response to Indi

Indi had written a post on the upcoming election and I was rather surprised by his assessment of the current regime. It was a relative assessment, in comparison to its predecessors but I find it difficult to believe that we have seen anything other than steady decline since the 1950's.

Are they less racist?

True, JRJ is one of the biggest villains; he promoted the language issue before SWRD, sabotaged the B-C pact and orchestrated (not ignored) the 1983 riots, plus of course the stupid new constitution.

That sounds like fairly high bar to beat, but the new lot is now stoking new religious hatred between Buddhists and minorities. They also seem to be trying set the minorities against each other - Hindu v Muslim/Christian and also Christian v Muslim. 

They are also seem to be busy executing N.Q Dias's strategic vision to militarise and garrison the North - see the posts that I linked to here.

They have not (yet) ended by shedding the same amount of blood that JRJ's policies eventually did (perhaps partly because international scrutiny - witness the ebb and flow of the BBS before and after CHOGM, UNHCR summits) but in terms of intent I would say it’s pretty disastrous.

In terms of the productivity and the economy I admit that they have poured a lot of concrete all over the countryside, but so did the leaders of Greece and Spain.

Fueled by cheap credit from European banks Spain and Greece embarked on grandiose, ego-boosting infrastructure. From Olympic stadia, to opera houses to airports gleaming new infrastructure dotted the countryside. They looked impressive and generated a great deal of pride and while the money was flowing no one worried. No one understood the cost or felt the pain - until the debt needed to be repaid.

Sri Lanka is no different, the glittering fa├žade, funded largely by Chinese and international debt gives the appearance of development and prosperity but is ultimately unviable. As long as the world economy remains in the doldrums and relatively cheap international credit is available, no one worries about the price. 

Official Government debt (including loans guaranteed by the Ministry of Finance) has ballooned by 64.5% between 2009 and 2013 (from Rs.4,328,495m to Rs. 7,120,075m). (This excludes debt raised direct by state owned enterprises and other agencies).

Sri Lanka’s Government revenue has been consistently below its recurrent expenditure, which means we are borrowing to repay interest on current debt, all the while taking on further debt to finance new capital expenditure.

Eventually lenders will begin to wake up and once the inflow of funds slows we will be faced with a debt crisis – being unable to repay debt and therefore unable to borrow further. Since public services are also (partly) paid for by debt these will either have to be cut back (painful austerity measures) or money will be printed locally leading to high inflation. Interest rates may spike when the Government starts borrowing locally with the knock on effects of driving private businesses down. This leads to declining investment, growing unemployment and all the rest that we have witnessed in so many other debt crises before and are particularly apparent in Spain and Greece today.

The well-oiled propaganda machinery which now paints Chris Nonis a gate crasher and denies an assault even took place will spring in to action blaming the international banks and lending agencies.

Of the politicians who hoodwinked the lenders with false statistics and promises and then pocketed the money (which is the main incentive for building white elephants in the first place), not a word is said.

As the Guardian says

As one of the smallest countries to host the event, the Greeks still speak of 2004 as a defining moment, when the country crackled with optimism, confidence and pride. The defiance of the doomsayers who believed the Olympiad would never get off the ground – given the chaotic countdown to the opening – still elicits cries of delight.

"For a short time we were the centre of the world, people knew that a place called Athens existed," said Dimitris Evangelopoulos, Greece's national track and field coach. "And we pulled off a good Games, everyone says it. "

And look where they ended. 

Our great moment of pride was in 2009. Since then the regime has taken Sri Lanka from flawed democracy to Banana Republic. We now seem to have set a course in the direction of a Pariah State.


Anonymous said...

Can't believe you wasted time on Sir Indi Samarajiva PhD (Gamey Kitchen Politics), who said this not long ago.’m-voting-for-sarath-fonseka/

I am with you though. You are right, Court Jester!

Jack Point said...

Thanks for the comment, Anon.

maf said...

Excellent post JP.

As a member of a minority community I never feared for my safety throughout the civil war (well enough to take another passport). In fact I moved back to Sri Lanka in 2006 just prior to the final war. I no longer feel so optimistic and am actively seeking opportunities outside.

Politically, the lack of an opposition is one of the true travesties that a friend warned me about during the 2009 election. MR is clearly not going to canvass the minority vote and will hand out the spoils of victory to whomever wants to tag along. With such divisive politics MR should be easily top-able but alas, there is no leadership in the opposition to speak of, corralling the disenfranchised to vote for a new leadership. RW would certainly be a worse president than MR. I do not feel very optimistic.

Economically, I believe we will only start to feel the pinch around 2016. Our balance sheet is not as overly stretched as Greece's nor do we have the pressure of a monetary union to deal with. However the resources are being squandered and mis-management is rampant in the public sector and seemingly getting worse.

I remain scared for our future..

Jack Point said...

Thanks maf for reading and the comment.

You are right about the lack of opposition. RW is a very poor candidate so lets hope the opposition unites to present a common front.

Anonymous said...

You know JP, no matter how badly we want people to understand the reality, they always end up voting for MR, based on the War, The Harbor, The Airport and the bloody roads. This is all that they have to say in terms of development in Aashik land.

CEB is in huge debt.
There's a massive fraud behind purchasing coal for Norochcholai which is more than Rs.150Bn.
And we're being bribed with tax reductions.
What's sad is that the general population digs this and will still remain faithful servants for a bunch of criminals.

Jack Point said...

This is the problem Sacramentum.

People are falling for the image and forgetting the reality.

MR's personal charm and charisma seems to have a powerful effect with the voters that seems to override the actual shortcomings of the administration.

Liberal One said...

Oh these UNP kids. They learn politics with the stories of their grand parents and wants everyone else to vote for UNP.

They don't know that although JR opened the economy (a good thing) he was a disaster when it comes to monetary discipline. The inflation was touching 20% throughout his two terms Plus he inherited a relatively peaceful country and left his predecessor a country with two wars! That is the record of the "pride" of the UNP.

Although Premadasa wasn't the best when it comes to monetary discipline he did so much, had a vision for the country and actually ended one war. It's my belief that although he provided arms to LTTE had he remained he would have eventually gone after LTTE and finished the second war as well. But again as per the UNPers of Colombo Premadasa is more of a "mistake" than a pride for them.

Then we have CBK who did nothing but waster two decades our lives.

The funniest thing is UNP is hiding behind a "common candidate" for the second time but these Kids want the citizen to vote for the UNP. I wonder how that is possible.

I agree with Indi. The common opposition means uncertainty. Mahinda will atleast keep the inflation low (around 4-5%), maintain a growth rate of 7%+, initiate more infrastructure projects and also keep the separatists at bay.

Jack Point said...

Liberal One, I fully agree with your assessment of the UNP.

What JRJ did was a crime. He had the power and the mandate to do anything - and he went and sowed the seeds of destruction.